A more thorough explanation:

An offshore corporation, also known as an offshore company, is a type of company that is registered in a country other than the United States. These countries, such as the British Virgin Islands or the Cayman Islands, have special laws that encourage investment. Offshore corporations are not supposed to conduct significant business in the country where they are registered.

Offshore corporations are often created to avoid foreign currency control, to have better conditions for cross-border mergers and acquisitions, to reduce management fees and regulations, and to gain tax breaks. For example, a company based in the United States might create an offshore corporation in the Cayman Islands to take advantage of the country's tax laws.

Offshore corporations can take many forms, including limited liability companies (LLCs) and limited liability partnerships (LLPs). For example, a company might create an offshore LLC in the British Virgin Islands to protect its assets from lawsuits.